From the stock price pullback after the interim results were realized to the surge and testing of the market, is VIVA BIOTECH (01873) about to usher in a rebound moment?

On the evening of September 16, Novo Nordisk and Anthropic reached a collaboration, announcing the use of AI models to support drug discovery; on the same day, GenScript also announced a collaboration with Eli Lilly's AI/machine learning drug discovery collaboration platform Lilly TuneLab. The stream of positive news drove multiple targets in the Hong Kong CRO/AI drug discovery sector to show collective movement on September 17, and also directly raised the market's risk appetite for VIVA BIOTECH (01873)'s AI CRO platform and CDMO commercialization logic. It was observed that on the morning of September 17, under the resonance of sector sentiment, VIVA BIOTECH's stock price opened slightly higher by about 1.12%, and within 40 minutes quickly pulled up to a high of HK$1.46, with the highest gain reaching 8.55%. However, although VIVA BIOTECH's stock price, driven higher by sentiment funds scrambling for shares, showed an obvious gain in the morning session, its stock price immediately fell back after touching the previous pressure level of HK$1.46, making that day's intraday surge a stress test on the trapped positions above. Nevertheless, after the appearance of this test candlestick, investors are paying more attention to whether a confirmed reversal and main upward launch can subsequently occur. Has a "" pattern appeared? After the market close on August 26, VIVA BIOTECH released its 26H1 financial report, showing that its revenue for the period reached RMB 1.007 billion, a year-on-year increase of 20.99%; but at the same time, the company's corresponding net profit was RMB 101 million, a year-on-year decrease of 32.1%. Although after the financial report disclosure, CMSC still maintained a "Strong Recommend" rating on VIVA BIOTECH in an updated research report, and estimated the company's revenue in 2026-2028 to be approximately RMB 2.02/2.49/3.27 billion, with adjusted PE of approximately 8.5/6.4/4.5 times. However, institutional expectations are not realized facts. The intuitive performance of revenue growth without profit growth, as well as the reasons for the profit decline caused by lower investment income, unfavorable foreign exchange, and increased R&D expenses for new businesses, still pushed VIVA BIOTECH's secondary market trading logic from "expectation trading" back to "profit realization trading," and thereby drove its stock price to switch from the earlier "accelerated sprint to the top" to "pullback repair after performance realization." It was observed that on August 27, VIVA BIOTECH's stock price fell 8.01% on heavy volume, with corresponding turnover expanding to HK$18.302 million, indicating that after the performance landed, funds first chose to cash in on the earlier CDMO + AI expectations. Driven by this trading logic, VIVA BIOTECH's stock price subsequently saw a maximum drawdown of as much as 19.50% during the period. But from the perspective of the interim report fundamentals, VIVA BIOTECH overall showed a performance of "strong on the revenue side, weak on the profit side." Therefore, the "four consecutive declines" from August 27 to September 1 were essentially the market first killing profit expectations, but still recognizing its medium- to long-term CDMO and AI direction. On September 11, VIVA BIOTECH's stock price bottomed out, falling to an intraday low of HK$1.28, also signaling that it had officially entered an oversold range. Afterwards, VIVA BIOTECH's stock price stabilized above the lower Bollinger Band, providing support for subsequent oversold repair. On September 16, driven by bullish sentiment toward the A-share CXO concept, the innovative drug/CXO sectors in both A-shares and H-shares showed an obvious risk appetite repair rally. As a small but beautiful CDMO target with a market value of about HK$3 billion, VIVA BIOTECH's peptide commercialization, AI drug discovery, and CRO order improvement logic happened to match the market's preferred high-elasticity repair direction that day. Therefore, although it had previously been suppressed in valuation due to profit-side disturbances, it still obtained excess allocation from funds, and the on-market trading logic also began to shift toward marginal improvement on its medium- to long-term revenue side and order side. Against the market background of heavy-volume absorption on the previous day, VIVA BIOTECH, which on September 17 formed a long upper shadow similar to a "" pattern, gained more investor attention. However, even if the candlestick resembles it, what VIVA BIOTECH formed on September 17 was not a "" pattern. Generally speaking, a standard emphasizes "secret absorption after a main force test," requiring a subsequent heavy-volume breakout above the high of the upper shadow. But from the perspective of the candlestick position, after VIVA BIOTECH's stock price rebounded on heavy volume on September 16, it followed through the next day and surged to HK$1.46, exactly touching the previous trapped-pressure zone. This position belongs to a rebound pressure test after a decline, not a typical low-level launch position, nor is it a relay position in a smooth upward trend. In addition, from the perspective of volume performance, after the heavy volume on September 16, VIVA BIOTECH's intraday turnover on September 17 fell to the level of HK$5 million, and after surging to the high of HK$1.46 in the morning session that day, there was no continued volume expansion, and it finally closed at HK$1.39, indicating insufficient follow-through from attacking funds. Therefore, compared with a "" pattern, VIVA BIOTECH's performance on September 17 was more like an intraday test during a repair rebound. From a technical perspective, only if the company's stock price subsequently breaks above and firmly stands on the previous pressure level of HK$1.46 on heavy volume can it indicate the possibility of further upside; otherwise, this upper shadow may further clarify VIVA BIOTECH's short-term pressure. When will certain growth pricing be realized? At present, across the entire CRO industry, leading players, relying on advantages in capital, technology, customer resources, and global layout, are the first to emerge from the industry trough and achieve performance recovery. Small and medium-sized CROs, however, face multiple difficulties such as insufficient orders, tight capital chains, and talent loss, and their room for survival is continuously being squeezed. How to respond to the industry's Matthew effect has become a question for small and medium-sized CRO companies like VIVA BIOTECH to consider. The 26H1 financial report shows that the company's revenue increased by 20.99% year-on-year during the reporting period, but revenue growth without profit growth was prominent. While overall net profit decreased by 32.1% year-on-year, the company's adjusted non-IFRS net profit for the period was RMB 128 million, a year-on-year decrease of 30.08%. At the same time, the company's gross margin for the period was 34.0%, further declining from 40.8% in the same period last year, mainly affected by gross profit growth lagging revenue growth and a decline in gross margin in some businesses. Against the backdrop of current external volatility, downstream customers (especially overseas customers) place more emphasis on service quality (quality control and compliance, process quality, delivery and supply stability, etc.), efficiency, and capacity location relative to service prices. Service providers with comprehensive layout and rich delivery experience in these aspects can often gradually accumulate brand effects, giving rise to a long-term industry structure of "the strong stay strong." However, as a small and medium-sized CXO enterprise, under the background of external volatility, its risk resistance undoubtedly becomes an important factor affecting its steady performance growth. By business segment, during the reporting period, VIVA BIOTECH's CRO business achieved revenue of RMB 405 million, a year-on-year decline of 4.2%. However, the CDMO business carried by its subsidiary Langhua Pharmaceutical showed impressive rapid growth, with revenue of RMB 601 million in the period, a year-on-year increase of 47%, becoming the core engine of the company's revenue growth. Regarding the reasons for the substantial revenue growth of this business, VIVA BIOTECH clearly stated in the financial report that it was mainly driven by two CDMO commercialization projects. One peptide project has entered the commercial production stocking stage, with revenue rapidly scaling and contributing to growth; the other small molecule project is already in the PPQ production stage and is expected to achieve commercial launch in 2027. Together, these will lay the foundation for the steady growth of Langhua's revenue in the coming years. Overall, the key information shown by VIVA BIOTECH in this interim report is that the company's core main business has not deteriorated, and its CRO business is upgrading from traditional structural biology services to peptides, antibodies, XDC, PROTAC, molecular glues, and AI-driven projects. In terms of the company's AI CRO capabilities, VIVA BIOTECH has built a relatively complete AI CRO platform around new targets, new mechanisms, and new molecular modalities, and covers the entire FIC drug discovery process. The financial report shows that the company's CADD/AIDD cumulative participating projects have reached 228, with 92 customers; AI-enabled projects contributed about 14.0% of CRO revenue, and the proportion of new molecular modalities rose to 17.7%. The company expects full-year CRO revenue growth to remain at or above the current level. In addition, the company's MARS multimodal algorithm platform, especially Pep2MARS, is forming technical barriers in the fields of peptides, cyclic peptides, and complex macrocyclic compounds; and the company's cooperation with international giants to promote an AI-driven "dry-wet closed-loop" drug discovery model has also been effectively validated. At present, although VIVA BIOTECH's AI CRO business is still some distance from scale realization, if subsequent MNC platform licensing, large-scale cooperation, or a continued increase in the revenue share of AI projects occurs, its business valuation is expected to accelerate its expansion from CDMO logic to AI pharmaceutical platform logic, and obtain certain growth pricing from market investors.